QUESTION 20

Landess Corporation currently has 120,000 shares outstanding of $1 par value common stock. The stock was originally issued for $12 per share. On March 15, the board of directors declares a 10% stock dividend when the stock is selling for $16 per share. Which of the following is the correct journal entry to record this transaction?

Debit Common stock $12,000, debit Paid-in capital $180,000 and credit Retained earnings $192,000. Debit Retained earnings $192,000 and credit Common stock $192,000. Debit Retained earnings $192,000, credit Common stock $12,000 and credit Paid-in capital $180,000. Debit Paid-in capital $192,000 and credit Retained earnings $192,000.

QUESTION 22

A corporation declares a dividend of $.75 per share on 12,500 shares of common stock. Which of the following would be included in the entry to record the declaration?

Retained earnings would be debited for $9,375. Paid-in capital in excess of par would be credited for $9,375. Retained earnings would be credited for $9,375. Dividends payable would be debited for $9,375.